Dan Gilbert vows not to settle suit brought by former ePrize workers

7:24 PM, May 17, 2013

Dan Gilbert, in a handout photo from his company. A lawsuit filed by a number of former employees of the marketing firm ePrize claims they should have shared in the money resulting from the sale of the company. / Gannett file photo

Detroit Free Press Business Writer

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Quicken Loans founder and Chairman Dan Gilbert this week vowed never to settle a lawsuit filed against him and other former owners of digital marketing firm ePrize by former employees.

A group of eight former ePrize employees who had received shares in the company’s stock filed suit recently in Oakland County Circuit Court saying they should have shared in a $100-million bonanza last year when Gilbert, ePrize founder Josh Linkner and other major investors sold the company.

Instead, the suit alleged, the major investors had contrived in recent years to manipulate the ownership stake so that the former employee plaintiffs got nothing when the company was sold.

“Defendants, by agreement amongst themselves and in pursuit of their own interests, structured transactions in a way that netted them $100 million in cash while freezing out plaintiffs and allowing them virtually nothing on the sale of the assets of the company,” the lawsuit said.

Gilbert said the accusations were unfounded. In an earlier statement, Linkner, who writes a weekly column for the business section of the Free Press, also said the charges were unfounded.

Although Gilbert was not a named defendant in the suit, plaintiffs attorney Gerard Mantese said Gilbert was an owner through an entity called Camelot that was named as a defendant. Linkner last year had said Gilbert was among those selling his shares in the company. Plaintiffs are seeking to depose Gilbert and other former owners in the suit.

“This is just a frivolous lawsuit by disgruntled ex-employees who are trying to take a shot and hoping somebody writes a check to them and goes away,” Gilbert said in an interview. “It’s not going to happen because we never settle, ever, if we’re right.”

“I don’t think it’s news,” he added. “Lawsuits get filed all the time.”

Mantese, the attorney for the plaintiffs, said the ex-employees had received stock in the firm as part of their compensation packages. But not only did they not receive part of the proceeds from the August 2012 sale of ePrize, they recently received tax forms from the firm claiming they owned taxes on the profits from the sale.

“Plaintiffs’ shares were so diluted that they became essentially worthless,” Mantese said in an e-mail. “The plaintiffs received zero for their shares.”

Based in Pleasant Ridge, ePrize grew from a small start-up firm in 1999 to one of America’s leading digital brand-marketing companies. Linkner and other owners sold the firm to Catterton Partners, a leading private equity firm based in Connecticut. The sale price was not made public at the time, but the lawsuit pegged it at $100 million.

The lawsuit has been assigned to Oakland County Circuit Judge Colleen O’Brien.